Weitbrec v. Morris

Opinion by Mr. Justice Teller. The defendant in error recovered a judgment against plaintiff in error for $45,000 as a broker’s commission on a sale of real estate. The complaint, in what is designated as a first cause of action, alleges that the defendant, prior to the 3rd day of April, 1909, appointed the plaintiff his agent “to find a purchaser and to sell and dispose of” the 3 R Ranch owned by the defendant; that, on said 3rd day of April, the defendant entered into a written contract as follows: — 347 — “Pueblo, Colo., April 3, 1909. Henry O. Morris, Pueblo, Colo. Dear Sir: I am in receipt of your letter of March 31st. I undertake not to withdraw the agency for the sale of the property (The 3 R Ranch) from you without giving you at least thirty days’ notice. The terms upon which the property is to be sold are: 1. I am to receive the amount of $80,000 as stated by you, without any commission or other deductions. 2. The terms are to be at least $25,000 cash on delivery of deed, deferred payments to be evidenced by notes of substantially even amounts, running not to exceed two, three, and four years, with interest at 6 per cent per annum, payable semi-annually, said notes to be' secured by first mortgage trust deed on the property. 3. As you are to receive your compensation from the purchaser or purchasers by means of an increased price over the price I am to receive, you are to so con-, duct all negotiations for sale and transfer of the property as to fully protect me from any and all claims, on the part of said purchaser or purchasers, and agents and other persons who may be -interested, or claim to be interested in the sale; and such matters and their sufficiency shall be subject to my approval. If this is in accordance with your understanding of our arrangement, please signify the same by signing the statement below. Yours very truly, R. F. Weitbrec, Henry O. Morris. The above is a correct statement of our understanding. Henry O. Morris.” — 348 — It is further alleged that by a subsequent writing the term of said agency was limited to expire at midT night on August 19, 1909; and that, on the 18th day of August, 1909, the plaintiff “found a purchaser for said ranch, the same being and constituting a syndicate composed of S. B. Rohrer, of Topeka, Kansas, J. E. (laugher, of Rocky Ford, Colorado, W. E. McCafferty, of Pueblo, Colorado, and Hume Lewis, of Pueblo, Colorado, and at said time the said purchasers were ready, able, and willing to purchase said ranch upon the terms as fixed by the said contract of agency, and at the price of $125,000 (the' payment of $80,000 of said purchase price to be made upon the terms of said contract of agency); that the fact of the procuring of a purchaser ready, able, and willing to buy said 3 R Ranch, together with the fact that the purchaser was a syndicate, represented by Hume Lewis, of Pueblo, Colorado, was communicated to said Weitbrec on the 18th day of August, 1909,” and that said, defendant, on the 28th of August, 1909, “refused to carry out said contract of agency, or to comply with the terms thereof,” and has ever since so refused, etc., by reason whereof, it is alleged, “the plaintiff has been deprived of the part of the purchase price coming to him over and above the $80,000 to be paid to the said Weitbrec, to his damage in the sum of $45,000.” The complaint contained two other causes of action, but as they were eliminated by the court without objection by the plaintiff, they need not be considered. The defendant attacked the complaint by motion to separate, which was overruled, and by motion to strike a considerable portion of the several causes of action. Although the motion was, as to many allegations, clearly well taken, it was overruled. The defendant then filed a general demurrer to the first cause of action, as well as special demurrers to the — 349 — ethers,- all of which were ov'errnled. The defendant answered, admitting- the agency, -denying that a salé had been made, or a purchaser found, and alleging that the sale agreement with Lewis was not made in good faith, but'with the intent to extend the term of the agency. The trial court, in overruling a motion, made by defendant at the beginning of the trial, to exclude all evidence, on the ground that no cause of action was stated in the complaint, said: ‘ ‘ The court is of the opinion that if there is ■ any cause of action here at all, it is a cause of action for a straight broker’s commission, and that all matters, except what goes to establish the affirmative and negative of the duties of a real estate broker under his employment to find within the time limited a purchaser or purchasers ready, willing, and able to buy upon prescribed terms, are outside of the issues of this case; and the court believes that the evidence should be so restricted. ’ ’ As thus limited to the first cause of action, the complaint, if any cause of action could be spelled out from it, was for damages for breach of contract; and its language, especially the prayer for judgment, shows that it was so intended. And that is the only action which could be brought on the facts alleged. Gregg v. Loomis, 22 Neb. 174, 34 N. W. 355. The plaintiff having pleaded an employment, not merely to find a purchaser, but “to sell and dispose of” the ranch, and having confirmed this allegation by setting out the agency contract of April 3rd, which created an agency to sell, a cause of action was not pleaded by alleging merely the finding of a purchaser ready, willing, and able to purchase. Nothing less than an allegation of an actual sale would make the complaint sufficient. The court erred, therefore, in overruling the general demurrer to the first cause of action. — 350 — The court erred, also, in not granting a new trial,, for the reason that the evidence showed neither a sale, nor the finding of a purchaser ready, willing, and able to buy, which was necessary on the court’s theory of the case. The case was tried upon the theory, suggested by the court, that the plaintiff’s cause of action was for a commission for finding a purchaser. Defendant in error relies upon a contract between himself, claiming to act as agent for Weitbrec, and Hume Lewis, to prove that he produced a purchaser; but an examination of said contract discloses that it purported to be an agreement to sell to Lewis with no reference to a syndicate. Both the telegram and the letter of Morris’ to Weitbrec, informing him of this contract, stated that a sale had been made to Lewis representing a syndicate. The names of the persons constituting such syndicate were not, however, stated, and we have presented to us, therefore, a case in which a claim for a commission is made for producing a buyer, without the vendor’s having been advised who the buyer was. In Gerding v. Haskin, 141 N. Y. 514, 36 N. E. 601, it was held that the principal is entitled to know the name of the buyer and, so long as there is uncertainty as to that, the broker is not entitled to a commission. In that .case, the buyer was a syndicate, but its members were not definitely named to the vendor, and the court held that the vendor, not knowing the purchasers’ names, was not liable for a commission. But the objection to the judgment in this case need not be put on that ground alone. The evidence shows that only one of the persons named in the complaint as members of the purchasing syndicate, i. e., McCafferty, had signed an agreement to become such a member, at the time the notice was given to Weitbrec of the sale; that is, on August 18th; nor was — 351 — it shown that there was at that date a binding agreement of any kind for the purchase. Gaugher, named in the complaint as a member, never signed anything, nor paid anything; Morris simply said that Gaugher agreed to go into the syndicate. Lewis signed nothing; and Rohrer, who, counsel for defendant in error would have the court believe agreed to make the purchase alone, never, prior to August 20th, agreed to buy anything, or to become a member of the syndicate. The nearest he came to it was in his telegram of August 5th, Exhibit J, in which he says: ‘ ‘ On return will inspect, and if everything is satisfactory, will take three-fifths or all, as per our understanding.” This was no agreement to purchase, but a promise to purchase if, on examination, things were satisfactory. On August 20th or 21st, he signed a subscription agreement to contribute three-fifths of the $50,000, proposed to be raised to carry out the deal. This syndicate agreement, signed after midnight of the 19th of August, though dated back to the 18th, was not evidence of an agreement within the time limited for the sale, even though it were otherwise unobjectionable. Nor is there any evidence that the sum of $5,000, recited in the Lewis-Morris contract as paid, was paid at all; if that is important. McCafferty put up his check for $1,000, but it is not shown that the check was good. A draft for $3,000 was drawn on Rohrer on the 18th of August, for which he later substituted his check for said sum, but the evidence does not show upon what bank it was drawn, and, naturally, there is no evidence as to the value of the check. Lewis drew a draft upon an individual, but there is no evidence that it- was accepted, or that the individual was able or willing to pay. The syndicate agreement signed by Rohrer and McCafferty, respectively, provided for payment of the — 352 — balance of 80 per cent in one case, and 90 per cent in tbe other, on demand by Lewis, after bis attorneys were satisfied with tbe title, but not earlier than 30 days after such demand. Manifestly, such an agreement, even if tbe syndicate bad been fully formed within tbe time limited for tbe sale, would not constitute a purchase in accordance with tbe terms offered by tbe vendor. Tbe evidence shows that no sale was made. for $125,000. McCafferty testified that $1,000 was all be was to pay. Tbe balance of bis $5,000 subscription was to be assumed by Lewis. Rohrer was to have $23,000 as a commission, and Lewis $10,000, and was to turn it in on tbe so-called purchase price, leaving only $12,000 commission to Morris. This, it appears, was to be evidenced by notes, whether secured on tbe land is not certain, and that $25,000 was to be evidenced by unsecured notes. There is testimony that tbe notes for $20,000 were to be secured by a second mortgage on tbe ranch. Who was to have these secured notes does not appear. If tbe $12,000 coming to Morris was a part of tbe $25,000 in unsecured notes, it cannot be said that be would have ever in fact received that sum; nor can it be known what part of it lie would have received, if any. If it was a part of tbe $20,000, secured on tbe ranch, there is tbe same difficulty; since there is no evidence that tbe ranch was worth any considerable sum above tbe $80,000, and tbe first mortgage might take the entire property. If tbe defendant in error’s position is correct, be would be entitled to recover, not what damages be actually suffered, but such a sum as be bad named in this transaction in excess of tbe vendor’s price, regardless of tbe fact that such excess might not be paid. The judgment makes tbe paper profits of tbe parties real, though they were prospective only, and highly problematical at that. — 353 — Again, the Lewis contract provided for a conveyance to -him, while the subscription agreement signed by Rohrer required the deed to run to him. Rohrer, then, cannot be regarded as a member of the syndicate which was buying through the Lewis contract, even though there were no difficulty in the fact that he signed after the agency contract had expired. Further, there is absolutely no evidence as to the ability of any member of the syndicate, except McCafferty, to buy. The testimony falls far short of that required to show such ability and readiness to buy, as would entitle a broker producing a buyer to a commission. It is further to be noted that the so-called sale agreement made provision for the furnishing of abstracts and for time in which to examine them, all of which provisions were wholly unauthorized by the agency contract of April 3rd. Every sale, unless otherwise stipulated, is upon the implied condition that the vendor will convey a merchantable title. If he can do that, he may, under proper circumstances, compel performance by the buyer, or. recover damages for non-performance. If, however, the vendee is bound £0 buy only in case the title is satisfactory to his attorney, he is always at liberty to defeat the contract by his attorney’s finding that the title is not satisfactory to him. Whether or not a title is merchantable may be determined by the courts; a finding by an individual, where a question is submitted to him for determination, is an act which only he can control. It is binding in the absence of fraud or mistake. 9 Cyc. 617; Keeble v. Black, 4 Tex. 69; O’Reily v. Kerns, 52 Pa. St. 214. In Nofsinger v. Ring, 71 Mo. 149, 36 Am. Rep. 456, it is held that, in the absence of fraud, the decision of — 354 — one agreed upon between the parties to an executory contract of sale to determine whether the goods offered conformed to the requirements of the contract, is binding- € Where a sale is made on condition that the thing sold be satisfactory to the buyer, the rule is, according to the weight of authority, that, if the buyer is honestly dissatisfied, it is immaterial that he ought to be satisfied and that his dissatisfaction is unreasonable; this for the reason that the law will not make contracts for people sui juris. 35 Cyc. 220. We are of the opinion that, upon the facts alleged in the complaint and the facts in evidence, the plaintiff was neither entitled to recover damages for breach of contract, which was clearly his proper action, nor for a broker’s commission. He neither sold the property, nor produced a buyer therefor. For the errors above indicated, the judgment is reversed, and the cause remanded to the District Court with directions to dismiss. Mr. Justice Hill concurs specially. Mr. Justice Garrigues dissents. Judgment reversed.